Call Option - Call options are financial contracts that give the option buyer the right but not the obligation to buy a stock, bond, commodity, or other asset or instrument at a specified price within a specific time period.
Covered Call - A covered call is an options trading strategy that involves selling (also known as “writing”) call options on a stock you already own. As a seller, you'll receive a premium in exchange for giving the buyer the right to purchase the stock from you within a specified time frame for a certain "strike price."
Delta - is a theoretical estimate of how much an option’s premium may change given a $1 move in the underlying. For an option with a Delta of .50, an investor can expect about a $.50 move in that option’s premium given a $1 move, up or down, in the underlying.
Drawdown - a drawdown measures an investment or trading account's decline from the peak before it recovers back to that peak. It remains in effect as long as the price remains below the peak.
Hedge - since our trading strategies are mainly bullish strategies, we often hedge our bullish portfolio by buying a QQQ put or buying a VIX call to delta balance our portfolio in case we experience a large drop in the Market.
IRR(Internal Rate of Return) - a financial metric used to measure the profitability of an investment over a specific period of time and is expressed as a percentage. For example, if you have an annual IRR of 12%, that means you have 12% more of something than you did 12 months earlier.
ITM - when an option is In The Money.
Leveraged Covered Call (LCC) - One covered call approach that offers the potential for improved overall performance, known as the "leveraged covered call," uses long-term equity anticipation securities instead of stock as the underlying asset. This strategy may also be known as the "poor man's covered call," a "fig leaf," or a "surrogate covered call write."
OTM - when an option is Out of The Money.
Put Option - A put option (or “put”) is a contract giving the option buyer the right, but not the obligation, to sell—or sell short—a specified amount of an underlying security at a predetermined price within a specified time frame.
Realized Gain - A realized gain is the profit on an investment that you've sold or that has been finalized.
Realized Loss - A realized loss is the loss that is recognized when assets are sold for a price lower than the original purchase price.
S&P 500 - Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices
Super Wheel Trading Strategy - Trading the wheel trading strategy on stocks paying dividends of more than 4%. Check out our Super Wheel Trader newsletter with trade alerts.
Theta - how much an option’s premium may decay per day/week with all other things remaining the same. Theta or time decay is not linear. The theoretical rate of decay will tend to increase as time to expiration decreases.
Unrealized Gain - which is the gain you've made on an investment that you still own.
Unrealized Loss - An unrealized loss is a decline in the value of an asset that has not yet been sold
Wheel Trading Strategy - The options wheel strategy is an income producing strategy involving selling put options, potentially owning stock, and selling covered calls until the shares are called away or the position is closed. The wheel is an increasingly popular strategy for investors that want to generate income before and possibly during stock ownership. Check out our Wheel Trading Strategy website.